SWD IA on EU copyright modernisation – impacts of second option for out-of-commerce works in the collections of cultural heritage institutions

EU legislative intervention (i) requiring MS to put in place legal mechanisms to facilitate collective licensing agreements for all types of OoC works and to foster national stakeholder frameworks, and (ii) giving cross-border effect to such legal mechanisms.

Under Option 2, the presence of legal frameworks everywhere in the EU that allow for licences issued by CMOs to also cover the rights of outsiders would give CHIs the possibility to see their related transaction costs diminish considerably everywhere in the EU for the digitisation and dissemination of works. This would apply to all types of works. Under this option, it would be possible for the CHI to reduce that cost to the one of negotiating a single licence with a CMO. Licences concluded on the basis of such legal frameworks could have cross-border effect for all works too.

The stakeholder processes that MS would have to put in place would have the same purpose as in Option 1, i.e. lay the ground for a conducive environment, in practical and organisational terms, for such legal mechanisms to be used in practice. These would be particularly relevant in those MS and for those sectors where licensing structures are not widely available and collective management not widespread.

In some sectors (e.g. audio-visual), without proper stakeholder engagement convened by public authorities, the practical effects of this option would not easily materialise, at least in the short term. It is expected that the presence in all MS and for all types of works of adapted legal frameworks would provide momentum for such stakeholder frameworks to produce results, especially when combined with the consultation with rightholders and uses that MS would have to organise if they decide to introduce national-specific criteria for works to be eligible for the envisaged schemes.

Impacts on rightholders would be the same in nature as in Option 1, but would extend to a higher number of rightholders because all types of works would be covered in all MS. Revenue opportunities are expected to arise concretely at different paces for different categories of works depending on the availability of suitable licensing structures as explained under “CHIs”.

The adaptations in rights management systems that this Option might entail will depend on the extent to which collective management is already a widespread practice in different sector. The use of the mechanisms introduced by this Option would in any event remain voluntary. The safeguards for rightholders, including from other MS and from outside of the EU, foreseen in Option 1 would also, mutatis mutandis, be present under this option, for works other than books and learned journals.

The freedom to decide on the type of exploitation of works that may be held by CHIs is for example important in the cinema sector, where old films considered part of cultural heritage can attract renewed commercial interest and new commercial exploitation. The systems envisaged under this option would not affect those possibilities because of the opt-out and the fact that works re-entering commercial channels would not be eligible anymore (as not OoC anymore).

The use of the mechanisms introduced by Option 2 would require to rely on collective licensing structures, which would need to be developed or consolidated in certain sectors, e.g. the AV sector. This would entail some one-off costs for rights holders and CMOs, but could result in the long term in more efficiency in the management of rights for the purpose of licensing OoC works. The impact for individual rightholders and CMOs would be the same in nature as in Option 1, but apply to all types of works.

The limited impact on copyright as a property right mentioned in Option 1 would affect more rightholders. Impact on the arts and scientific research, as well as education could be even more positive as all types of OoC works could become available.

Option 2 is the preferred option is as it would, on the one hand, put in place legal frameworks conducive to a reduction of transaction costs and make possible the specific licences required for the digitisation and dissemination of OoC works, for all types of works and in all MS, including across borders. On the other hand, it would not affect the interests of rightholders to any tangible extent, or imply additional costs for them, for example in terms of missed revenues or licensing opportunities (it creates on the contrary potential opportunities for new revenue and exposure).

Option 2 would require some adjustments in the MS that already have national legislation in place allowing for licences issued by CMOs to also apply to the rights of unrepresented rightholders, notably as regards the scope of their legislation (for example, when it only covers certain types of OoC works). Where national legislation already covers a broader scope than what is foreseen by Option 2 (for example in the cases of general ECL), the need for adjusting national legislation will be more limited.

MS that do not already have national law supporting mechanisms like those foreseen by the preferred option will be required to introduce them. In all cases, however, MS will retain flexibility in the way they comply with the EU obligation introduced by Option 2 in the choice of the kind of mechanism (for example ECL or presumption of representation) and by establishing additional national criteria for different categories of works to be considered OoC for the purposes of the mechanisms.